👋 Hey, Lenny here! Welcome to a ✨ bonus edition ✨ of my weekly newsletter. Each week I humbly tackle reader questions about product, growth, working with humans, and anything else that’s stressing you out about work.

On to this week’s post…

Q: I’m about to start interviewing for a new job, and I’m really bad at negotiating. I know I should, but I basically never negotiate my comp. How do I learn to negotiate, without pissing anyone off?

If you think you’re bad at negotiating, I’m even worse, I promise you. Why can’t you just tell me how much it’ll be, and then we can move on? Why do we need to play this game?? Jeez louise.

Well, the reason we have to play this game is because, like it or not, everyone else is playing it. And you’re probably losing — on salary, equity, and promotions.

The good news is that because the other side is playing, they expect you to play along (especially at larger companies). So it rarely creates hard feelings when you negotiate. But you have to know how. And that’s where today’s post comes in.

Since I’m so bad at this, I pulled in Niya Dragova, co-founder of Candor, to answer your question and to share her hard-earned negotiating wisdom with us. Niya has single-handedly helped hundreds of people negotiate their compensation at all of the top tech companies and, as you’ll see below, has incredible insights into the process. I can honestly say this is the most useful post I’ve ever come across on the topic, and I’m really excited to share it with you all. Enjoy!

You can find Niya on LinkedIn and Twitter, you can learn more about Candor here, and don’t miss Niya’s insightful weekly newsletter that highlights hiring trends across the largest tech companies.

The 10 commandments of salary negotiation

by Niya Dragova

The largest salary increase I’ve helped get was for a female FAANG executive: I helped her get $5.4M more on her offer. Through the process, it struck me that even though she was a senior leader everyone admired (you’d 100% know of her if I told you her name), she had very little knowledge of how to negotiate. Don’t get me wrong — she knew how to ask and be assertive, but she was much less comfortable “playing the game.”

And she’s not alone.

Regardless of how senior or junior you are, most tech folks struggle with negotiation. Partially this is because compensation is set up to be intentionally misleading. Partially it’s because sticking up for yourself is nerve-racking AF. 

Here are the 10 commandments to negotiation I wish everyone knew: 

1. Negotiation starts earlier than you think

Every recruiter worth their salt will ask about your salary expectations when you first start interviewing. Do not — I repeat, do not — give them a number.

What to do instead: Ask for the range they’re budgeted for the role.

How to say it: “Can you tell me the salary band for this level? Happy to let you know if it’s within my range, and we can discuss specific numbers later when I’ve met the team.”

Bonus points: If you’re junior/mid, time all your interviews so you get offers around the same time. If you’re senior, get some press before you start meeting folks.

2. Mine for intel during interviews

Go into the interview ready not just to answer questions but to ask some of your own. You will use this as ammunition to negotiate later. Here are a few examples of what you should ask:

• What’s the biggest priority for the team right now?

• Why is this role open?

• What’s the biggest challenge for someone stepping into this role?

• How does the org structure on the team work?

3. Don’t give in to the pressure

Once you’ve been offered the role, the recruiter’s job shifts from evaluating you to closing you. Most experienced recruiters will ask you again to put up a number for your salary. Clever recruiters may even tell you that they “will go to bat for you.” Yeah, no thanks.

What recruiters say: “If you give me your number, I will make it happen for you.”

What they mean: “I’ll get you something lower, but kinda close to what you asked for.”

4. At FAANG, your recruiter may have no say at all

At FAANG-size companies (i.e. over 5K employees), compensation is heavily formulaic. In fact, there is often a separate team — the “compensation committee” — who sets your salary. They take into account your background, interview performance, and level. They give the recruiter a number to go with. The recruiter then gives you the number, and every time you negotiate they have to go back to that committee to ask for a re-evaluation.

What do clever recruiters do? They get your number up-front to save some legwork.

Unfortunately, this may hurt your chances of getting more on your offer later. It also deprives you of some valuable data — where you fall in the level/salary band. If you get caught in this loop, quickly turn the tables: most companies will consider “new information,” like another offer, to reopen a negotiation. Don’t forget, an offer to stay from your existing company also counts!

5. Read between the lines

Your initial offer speaks volumes, if you know how to interpret the data. Here are a few scenarios you should consider:

Let’s say you’re applying for an L6 role at a big company. 

Initial offer comes in low: The team may have felt that you have a lot of “room for growth.” In this case, my advice is to dig deeper and ask the interviewer to share feedback from folks who met you to fix any misconceptions before you ever negotiate. Telling someone you want more money because you’re “the greatest PM ever” while the team felt you were “meh” is not going to fly.

Middle of the road: You got “the number” (the medium opening number that’s basically a template recruiters use). It’s the most common opening offer — companies do this to reduce risk of lawsuits. Over 80% of people get it. It likely means you don’t have a strong advocate on the interview loop. Do not negotiate until you match with a team and you have a manager batting for you. 

Initial offer comes in top-of-band: There was likely a discussion about giving you a higher level. Many times in this case, you can push for an “out-of-band” offer — essentially getting paid for an L7 while you’re an L6.

6. At a startup, the playbook is different 

You may be dealing with the founder directly. It’s very likely there is no range for the role, as smaller companies have much less access to salary data. The goal at the initial offer conversation is to understand three things:

• The current state of the company (financing, runway, profitability)

• The plan for your role/function

• The value of the equity, considering exit scenarios

That last one can be tricky because you need data the recruiter may be reluctant to give — the option strike price, preferred price, number of outstanding shares — and you need to understand how options work. At last, get ready to ask:

“What is the valuation based on?”

And get ready to not get a straight answer until you’ve asked five times (yes, this is normal). 

TL;DR: Ask the questions an investor would ask because, *news flash*, you are now an investor — but instead of cash, you’re staking your time and earning trajectory on the company’s success. You can meet with the investors too; it’s 100% OK to ask for that when the company is early-stage.

Lastly, 2021 has been a weird year for startup compensation, so much of the data from previous years is unreliable. Remote work, abundant access to capital, and greater trust in international talent have skewed things quite a bit. Still, I find the Holloway Guide ranges to be a good starting point.

7. Your job is to win hearts and minds

It can be tempting to think you need to negotiate now that you have data. Nope, not yet. The next step, instead, is to upsell your worth before you come back with any kind of counteroffer. This is especially important if you’re going for a senior role.

What to do next: Ask for follow-up meetings with decision makers. If you’re a Director or higher, you can usually ask to meet with any VP and possibly C-level execs. VPs can often meet with the CEO and even board members. Take your time; this is important if you want your salary to reflect your value. If everyone wants you, you’ll be calling the shots later.

How to run these effectively: Come prepared with three things, tailored to who you’re meeting: 

• Questions about how you can create meaningful impact

• Ideas based on your interviews so far

• Bonus points: discussing obstacles to your taking the role and making them sell you on it

8. OK, now get some good data

Did you know that women make only 47 cents in equity for every dollar a man makes? A HUGE reason for that is that many women don’t fully evaluate their offer before negotiating. Let’s change that. Particularly if you are a woman, ask yourself these questions: 

• Is the offer competitive? (Browse 5.3M offers here.) 

• How does it work? (When do I vest; what is the stock worth?)

• Is it all true? (Is the value of the equity over-inflated?)

• Does it add up? (Consider taxes on bonuses and stock.)

• If you have goaled comp, are the goals realistic?

9. Comparing offers

Not all offers are made equal — in fact, they are intentionally confusing. At Google, you may get a front-loaded vesting schedule on your stock; at Amazon, sizable cash bonuses the first two years. It seems obvious that you should look at the comp, but that’s not everything:

• Which company has a better trajectory?

• How do promotions work?

• Is your manager influential enough to pull for you when needed?

• Is your product or team visible enough to get good resourcing?

• What’s the company brand worth to your earnings trajectory?

TL;DR: Getting paid more up-front doesn’t always mean you’ll make the most overall. Plan carefully.

10. Time to make an ask

It can be awkward to ask for more money, but trust me, everyone expects you to do it. On top of that, it doesn’t help that so much of the advice out there is conflicting. Let’s set the record straight:

“I need a competing offer.”

MYTH: You absolutely do not need multiple offers. Just being able to say you’re speaking to other companies is sufficient — you can quote the expected salaries for other roles if needed.

“I need to provide copies of my other offers.”

MYTH: Nope, nope, nope (even though Google in particular loves to ask for them). You signed an NDA before every interview, so you can always use that as a reason.

“I should send the recruiter an email with my ask and justification.”

MYTH: Negotiating via email = MAJOR CRINGE and definitely a worse outcome. I know there are folks selling fill-in-the-blank templates out there. My advice if you want a meaningful/large increase is to have the conversation over the phone. 

“If I find a number online, I can quote it as a reason to get more.”

MYTH: Nothing boils a recruiter’s blood more than “It says X on Glassdoor.” Compensation is an exact science — have arguments prepared that are specific to your situation.

“The best way to get more is to reiterate how qualified I am.”

MYTH: You already got interviewed and everyone’s read your resume. That’s how you got your initial offer; now you need to build additional arguments. Use the information you collected during the interview about what challenges the team is facing — maybe that increases the scope of the role? Discuss why leaving your current role will be hard — are you critical to your current team? In other words: instead of asking for money, make them give you more money by bringing in obstacles the recruiter needs to overcome to close you. 

“I need to be aggressive and threaten to walk if they don’t match.”

MYTH: LOL, let me know how that goes for you. My guess is you’ll get a mediocre increase worded as a “final offer.” If you want big moves, I’m talking $100K+ more, you need to collaborate with your recruiter, not make them an enemy.

As a final word of wisdom: Start with negotiating your overall compensation, not individual components. For example, ask for “500K” and then the next round ask “Can I have X more equity?” Then, when you’ve exhausted all other avenues, ask for a signing bonus. If you still need more help, you can always read our guide.  

Now that you’ve got all these RSUs in your compensation…

If your new RSUs are more than 10% of your liquid net worth, you should make a plan to diversify ASAP. Holding a concentrated position can translate into greater portfolio volatility, which has been shown to reduce compounded growth rates and future wealth. At Candor we help you automate RSU diversification by converting your stock weekly, even during blackout periods. You can find us here.

Thanks, Niya!

Till next week, and have a fulfilling and productive week 🙏

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